Friday, March 04, 2016

Land o' (non)confusion: no dilution or reverse confusion with dissimilar goods

Hugunin v. Land O’ Lakes, Inc., No. 15-2815 (7th Cir. Mar.
1, 2016)

This opinion reflects what you might call Judge Posner’s
trademark mix of good sense and arrogance/lack of reasons enabling one to
formulate an actual rule for future application.

Since 1997, James Hugunin made and sold fishing tackle in a
town in northeastern Wisconsin, which is called Land O’ Lakes because it is
located in a region dotted with lakes; the region is also called Land O’ Lakes.
He registered LAND O LAKES as the trademark of his fishing tackle in 2000; the
registration lapsed, and his application to re-register was held in abeyance
pending resolution of this suit.

Defendant, a large agricultural cooperative, sells butter
and other dairy products throughout the United States, and has used the LAND O
LAKES mark since the 1920s. In 1997, the dairy company became the “official
dairy sponsor” of a sport-fishing tournament, the Wal-Mart FLW Tour, and began
advertising its dairy products in fishing magazines. In 2000, it found out
about Hugunin’s registration and threatened him with infringement
liability/told him that he needed a license from the dairy company. After he
refused to comply, the dairy company opposed his new registration.

The court expressed its puzzlement that the dairy company
should have been worried, given the differences in the parties’ products. It
doesn’t sell any fishing-related products that could be confused with
Hugunin’s. “It would be strange indeed for a dairy company to manufacture a
product so remote from milk, butter, and cream, and there is no sign that the
dairy company intends to take the plunge.” The dairy company sponsored the
fishing tournament and advertised in fishing magazines “because fishermen, like
the rest of us, are consumers of dairy products.”

The court was equally puzzled as to why Hugunin sued the
dairy company for trademark infringement. Hugunin claimed to have trouble
attracting investors worried about being sued for trademark infringement/having
the name enjoined. The dairy company counterclaimed for dilution. The district
court dismissed the dilution claim as barred by laches, but the court of
appeals—not even pausing to make clear that this was a proper ground—reached
out to explain that, even without laches, the dairy company would have lost. In
Ty Inc. v. Perryman, 306 F.3d 509, 511 (7th Cir. 2002), Judge Posner explained
dilution as involving increased consumer search costs, such that consumers
would have to “think harder—incur as it were a higher imagination cost—to
recognize the name as the name of the store”; blurring “reduces the distinctness
of the trademark as a signifier of the trademarked product or service,” and
tarnishment is a subset of blurring. (Pause to note that this theory is not
borne out by the evidence of how consumers actually think.)

Here, though, Judge Posner found a blurring theory
implausible, because the goods were too
different:

Everyone recognizes “Tiffany” as
the name of a luxury jewelry store on Fifth Avenue in New York (with stores in
other major cities), and seeing the name on a hot-dog stand a passerby might
think of the jewelry store and of the incongruity of a hot-dog stand’s having
the same name; he might think the jewelry store’s cachet impaired by the coincidence
and switch his patronage to Cartier or Harry Winston. [Ed. note: Yeah, right.] Many
consumers would recognize the name “LAND O LAKES” as referring to the dairy
company, but we can’t see how the company could be hurt by the use of the same
name by a seller just of fishing tackle. The products of the two companies are
too different, and the sale of fishing tackle is not so humble a business as
the sale of hot dogs by street vendors. And so it is beyond unlikely that
someone dissatisfied with LAND O LAKES fishing tackle would take revenge on the
dairy company by not buying any of its products, or that a customer would have
difficulty identifying Land O’ Lakes’ dairy products because he had seen the
LAND O LAKES mark used on Hugunin’s fishing tackle. … And the dairy company’s
mark is itself derivative from Minnesota’s catchphrase “Land of 10,000 Lakes,”
a phrase in such widespread use that the company could not insist that it was
the sole lawful user of the phrase in advertising for all products.

Out of this mishmash of rationales, let me select a few
possibilities: (1) While dilution doesn’t require similarity in goods and
services, sufficient dissimilarity may preclude dilution. The reason why is
left as an exercise for the reader. (2) Land O Lakes is not high-falutin’
enough to be blurred/tarnished the way a luxury brand could be by association
with fishing tackle; no one would feel the dairy company was passé, and overexposure isn’t
a concern for such a product. (3) Land O Lakes is already not unique and can’t
suffer more from one more use. Other thoughts?

Meanwhile, Hugunin’s trademark infringement claim was based
on his seniority in the fishing industry and alleged reverse confusion. “But
the dairy company’s use of the same trademark is confined to products so
different from Hugunin’s that few if any consumers would think that simply by
virtue of having an identical trademark the dairy company was competing with
Hugunin in a different industry.” The fishing-themed ads run by the dairy
company showed things like the “Land O’ Lakes Walleye Pro,” “a champion fisherman
whom Land O’ Lakes sponsors in fishing competitions in return for his promoting
its dairy products.” He’s shown sitting next to packages of Land O’ Lakes
butter and cheese, and the company’s logo is also on fishing boats during
tournaments.

The Land O Lakes Walleye Pro

In a line that defendants are sure to love, Judge Posner
writes, “But just as no one watching a NASCAR race and seeing a racing car emblazoned
with Budweiser’s logo would think that the beer company had entered the automobile
industry, so no one reading the ‘Walleye Pro’ ad or seeing a boat sponsored by
the dairy company would think that the advertiser sells fishing tackle.”

Hugunin also objected that the dairy company “permitted”
some competing producers and sellers of fishing tackle to use its trademark. If
they were licensees, the court continued, that might justify a claim of
trademark infringement—the dairy company might be intentionally encouraging
those competitors to infringe Hugunin’s mark in order to increase its own
revenues from licensing. “But there is no evidence that Land O’ Lakes has
issued any such licenses or is even aware that other producers of fishing
tackle have used its mark.”

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